Toyota Motor Corp., already coping with worldwide recalls of some 8 million vehicles to fix accelerator pedal flaws, has been ordered by Japan’s transport ministry to probe complaints that the company’s best-selling Prius hybrid sedan may have defective brakes.

The ministry says it received at least 14 reports in November and December about Prius cars that lost braking power. In the U.S., the National Highway Traffic Safety Administration reports more than 100 such complaints.
The reports describe a momentary loss of braking, especially when driving over slippery or bumpy roads at low speeds. The Nikkei speculates the problem may relate to the car’s regenerative braking system, which converts energy normally wasted during braking into stored electrical power. An onboard computer coordinates the two braking systems.

Meanwhile, Toyota is rushing parts to European dealerships to fix 1.8 million vehicles equipped with defective accelerator pedals that may not return to the idle position when released. Dealerships are expected to start repairing vehicles next week.

The European recall involves the Auris, Avensis, Aygo, Corolla, iQ, RAV4, Verso and Yaris built since February 2005. Toyota is conducting a similar campaign in North America that involves another 2.3 million Toyota brand models.

Last fall Toyota began a recall of nearly 5.4 million Toyota and Lexus vehicles in the U.S. to fix an unrelated flaw that could permit the driver’s side floor mat to jam the accelerator pedal in the open position.

The British government will announce this morning that it is extending its scrappage incentive until 31 March to ensure that the entire €458 million allocated to the program is spent, says Autocar.

The scheme, which was to expire at the end of February, offers buyers £2,000 (about €2,300) to scrap a car that is at least 10 years old and replace it with a more efficient new model. The plan began last June, and monthly sales in the U.K. have topped year-earlier levels since July. December sales surged nearly 39% to 151,000 units.

The British government initially budgeted £300 million (€340 million) for the program, which is co-funded by participating carmakers and their dealers. London agreed in September to provide another £100 million (€114 million), which was expected to cover the sale of an additional 100,000 cars.

Autocar says about 25% of the 1.95 million cars sold in England last year were registered under the scrappage program.

Russia’s auto production plunged last year to 597,000 units from 1.45 million in 2008, according to Prime-Tass, which cites figures from the country’s Industry and Trade Ministry.

The report says last year’s output of foreign-branded cars dropped almost 53% to 281,100, and production of domestic brand cars plummeted 64% to 316,900. Truck and bus assembly fell by 64% to 91,400 and 46% to 35,500 units, respectively.

Car sales in Russia fell 49% to a four-year low of 1.5 million vehicles last year from a record 2.9 million in 2008. Top-selling brands in 2009 were Lada, Chevrolet, Ford, Hyundai and Toyota.

Italian Economic Development Minister Claudio Scajola is threatening to cancel plans to introduce new scrappage incentives this year, apparently to pressure Fiat SpA into reconsidering its plan to close down its Termini Imerese assembly plant in 2011, reports Agence France Presse.

Tax-News.com notes that the two issues have been “intertwined” since Fiat announced plans three months ago to close the facility. Last week the online news service reported that Scajola was developing a new scrappage plan that would pay consumers less than the €1,500 incentive offered in last year’s program. But it said the scheme would not be ready until after an EU industrial sector meeting on 9 February that was expected to discuss auto incentives.

Fiat CEO Sergio Marchionne has urged the Italian government to continue offering incentives to avoid a sharp drop in car sales this year. Last month he said Fiat will suspend production for two weeks at all its plants in Italy beginning 22 February because of slumping sales. He has estimated that car sales in Europe will shrink by 12% this year even with new scrappage programs—and by 16% if no new incentives are introduced.

Separately, Marchionne has pledged to boost car production in Italy by 50% over the next several years to more than 900,000 units, in part by shifting some production back to Italy from facilities outside the country.

Kia Motors Corp. will introduce a longer, lower, wider and more carlike Sportage midsize SUV at next month’s Geneva auto show. The vehicle goes on sale in September.

Kia Sportage

Kia offered no details about the next-generation model. Autocar speculates the vehicle will be offered in front and all-wheel-drive versions and a choice of two diesel and two gasoline engines. The magazine says the new Sportage is likely to be base-priced at €17,700.

Kia will build the new Sportage in its assembly plant in Zilina, Slovakia, alongside its sister vehicle, the Hyundai ix35, known as the Tucson in some markets. The plant launched production of the ix35 in January.

Scania AB reports that its fourth-quarter net profit plunged 46% to 822 million kronor (€81 million) last year as revenue dropped 19% to 18.4 billion kronor (€1.8 billion).

But the Swedish truckmaker says new orders from October through December jumped to nearly 14,000 units from only 2,400 a year earlier when the global economic crisis froze demand for commercial vehicles. The company’s full-year truck orders were down 25% last year. Sales declined in all major markets except Brazil last year.

Scania says truck orders from western Europe grew to 4,800 in the fourth quarter from about 3,000 in the third quarter. The company says the commercial vehicle market in the region has stabilized.

Honda Motor Co. expects its operating profit in the fiscal year beginning 1 April to jump to €3.2 billion from €2.5 billion in the current year. The company previously predicted this year’s profit would be about €1.5 billion.

The company says its net profit in the current fiscal year will be about €2.1 billion, nearly twice that in fiscal 2008. Operating profits from October through December soared 73% from year-ago levels to €1.4 billion.

Analysts say Honda has benefited from cost-cutting efforts, continued strong sales of its motorcycles and government scrappage programs in major markets that boosted demand for the company’s predominantly small and fuel-efficient cars.

Honda expects its global car sales in the current fiscal year to slip 3% to 3.4 million units. But it predicts demand will reach 3.6 million in the new year. The company says it foresees “a fundamental ability” to generate 100 billion yen (€791 million) in operating profit in each quarter.

Volkswagen AG says it will issue only a portion of the 135 million in new shares permitted by its shareholders, ending speculation that the company might be planning a huge acquisition.

VW’s shareholders approved the issue in December, which, at the company’s current stock price, would be worth about €8 billion. But Chief Financial Officer Hans Dieter Poetsch told analysts yesterday that the offering will be “tailored to what is necessary” to maintain a comfortable level of net liquidity.

Poetsch suggests that the stock issue will be used to restore liquidity that was reduced last year by its acquisition of 49.9% of Porsche AG (€3.9 billion) and 19.9% of Suzuki Motor Corp. (€1.7 billion). He also says the company burned through €1 billion in cash in the fourth quarter.

Analysts predict VW will issue the new stock in at least two separate tranches. They also speculate that VW may use some revenue from the sale to move ahead with plans to boost its 30% stake in German truckmaker MAN AG.

Retail sales in the 16-member eurozone—which declined by 0.5% from October to November—remained unchanged in December, according to Eurostat. Sales were 1.6% below December 2008 levels.

Economists say the tepid figures show that Europe’s economic recovery remains fragile and uncertain. Analysts polled by Dow Jones Newswires had expected retail sales in the eurozone to grow by 0.4% from December to January.

Results across Europe’s largest national markets were mixed. December-to-January retail sales grew by 0.8% in Germany, 1.2% in France and 0.9% in Spain. They fell by 0.9% in the U.K. No data was reported for Italy.

CEO Nick Reilly says Opel will retool its Eisenach assembly plant in Germany for a new model in 2013, thus refuting speculation that the facility might close or be sold to Daimler AG. The facility currently produces the Corsa supermini.

Reilly did not describe the new model to be produced at Eisenach. Opel reportedly will introduce a small SUV based on the Corsa platform in 2012 or 2013, and Reilly has said Opel wants to develop a minicar for sale in Europe. Media reports speculate the car also might be based on the Corsa.

Opel has pledged to cut its European production capacity by 20% as part of its turnaround plan to return to profitability. It confirmed in January it will close its Astra assembly plant in Antwerp, Belgium, by summer but has not detailed how it will achieve its overall target. The company presents is restructuring plan to the German government this week.